Arbitration Ordered In TDMs Legal Battle Against Birch

A federal judge in Kentucky has ordered arbitration to settle litigation Telecom Decision Makers Inc. (TDM) filed against Birch Communications, seeking compensation for what it contends is more than $5.5 million in lost commission payments.

The arbitration is aimed at bringing an end to TDM’s legal fight against Birch, which it launched in November 2008. The amount TDM is seeking in arbitration has yet to be determined, said Robert Bowling, the company’s president.

“TDM sees arbitration as the next step in resolution of this long-term dispute,” he told Channel Partners.

Tim Phelps, Birch’s director of marketing communications, said he can’t comment on the specifics of the litigation because the case is still active.

“Our partners are an integral part of our sales strategy,” he said. “We believe in engaging and enabling our partners to help them grow their business. As we continue to grow, the partner channel will continue to be an important part of our business.”

In January 2014, a federal jury reached a verdict in TDM’s favor, deciding that Birch assumed obligation to pay TDM recurring commissions after the Atlanta-based tech service provider bought assets and customer accounts from Navigator Telecommunications in November 2008.

TDM, of Louisville, Kentucky, contends Birch owes it more than $5.5 million in back commissions because it should have honored TDM’s agent agreement with Navigator.

The federal jury wasn’t asked to consider the issue of awarding damages. As a result, TDM one year ago filed a new suit in Kentucky Circuit Court in Oldham County against both Birch and Navigator, seeking compensation for the unpaid commissions and punitive damages.

Subsequently, Birch filed a request in U.S. District Court for the Western District of Kentucky to have the state suit moved to federal court and added to the original case. The suit was then moved to federal court, which prompted the Sept. 29 ruling.

U.S. District Court Judge David Hale granted Birch’s motion to dismiss and denied other motions by TDM. In his ruling, Hale said the contract at issue “expressly states” that any disputes arising out of or relating to the agreement “shall be resolved in arbitration,” and that the court already had ordered that TDM’s claims should proceed to arbitration.

“Nothing definite has been scheduled, but we hope to have the arbitration hearing in the first half of 2016,” Bowling said.

This past summer, a number of telecom agents told Channel Partners that they were mistreated and lost their commissions when Birch purchased the assets and customer accounts from companies with whom they had agent agreements.